Josh Goodpaster was tickled to show me a new tiller his family had bought, a gift from a great grandmother that will make the family garden more productive. “I like the idea of having a vegetable garden and growing stuff, and being an entrepreneur and selling vegetables to provide food for my family,” he said.
The family that resides off Thrasher Pike is anticipating watermelons, peanuts, squash, peas, peppers, tomatoes. Josh had worked in my family’s house as a helper to his dad, Bill, a painter and contractor.
Josh has an interest in economics. He’d like to become a farmer and sell produce in Hamilton County. Josh didn’t blink as we sat at the great table of his nine-member family and I pleadingly placed before him a dollar, five F$20 bills and a F$1 bill. If you add up the printed and engraved numbers, you get 102. Can these numbers rightly be counted in the same math problem? Or should I be making a class distinction among mediums of exchange and not trying to make a sum?
My consultant is very patient with me, knowing that I have to receive simple explanations several times.
“MOST PEOPLE THINK of Federal Reserve notes as actual money,” he labored, “and they use the term dollar. But the term dollar is an amount of gold. The dollar we have is not a dollar. It is a Federal Reserve note. It doesn’t have a lot of value, because with inflation, the value goes down when they print a lot of money.”
The farmer is a boy who has a sense of the tangible, the physical. He tried to explain the difference between the filmy notes and the shiny coin, a Morgan dollar I happened to have on my person. The problem with the central bank currency, he said, is that it is abstract, not concrete, not tangible. I asked him if there is a problem with the writing on the green pieces of paper and whether it might compensate for the paper’s lack of weight.
“You should, if we didn’t have inflation, you should be be able to get milk, eggs and bread for just one dollar. If you had a gold standard, and the Federal Reserve note was actually worth a dollar, and the term dollar would be a term of measurement being used as to how much you could get …”
Here he trailed off, unable to find the thread of his idea somewhere between the subject and the verb.
He started over. I’ll paraphrase Josh, to avoid having to pay a higher fee. If you have a F$5 bill, you can buy two items. Pretend you hold on to that bill for safekeeping for a few years, and finally bring into the daylight to spend it. You find it has power sufficient to buy no more than the jug of milk. “[The bill] has lost much of its value,” Josh explained.
I asked him if Federal Reserve notes, which also are injected electronically into the economy as loans and stimulus, are a moral problem. Are they sinful? Do they hurt people?
YES, THE CONSULTANT said. Paper notes of no fixed value and not connected in their legal language to any lawful money held on reserve are akin to violating the commandment against theft. I asked which commandment that is. He thought for a moment, and offered the eighth, “Thou shalt not steal.”
Josh mentioned a movie he had seen in which people were hauling currency in a wheelbarrow to shop for groceries. Inflation ends in the need to have zillions of dollars to buy necessities of life. This may give money physicality and weight, like gold and silver coins. But the benefits of inflation seem lost on my adviser.
I decided after our session to look further into the matter, perhaps look in upon a lesser light, Professor Bernanke himself. I’ll check out the Federal Reserve System chief’s lecture online and get back to you.